McGroarty tells the story of what he calls a “Red Swan” based on COVID-19’s point of origin in Wuhan, China — a leaked classified cable sent by the U.S. State Department in 2010 revealing “Critical Infrastructure/Key Resources” outside of the U.S. “whose loss could critically impact the public health, economic, and/or national and homeland security of the United States.” On it, under the heading for China: “Polypropylene Filter Material for N-95 Masks” — which, as McGroarty points out, are “[p]recisely the ones the federal government and states are scrambling to source right now. […] The U.S. Government knew in 2009 that N-95 masks were critical, came from China… And did nothing about it.”

However, and this is where followers of ARPN may perk up, this is not all.  

As McGroarty writes, the classified list in the cable also included a series of mines in China that were deemed critical, developing critical materials ranging from fluorspar and germanium over graphite to Rare Earths, tin and tungsten — for all of which the United States is greatly import-dependent, with degrees of reliance ranging from 63% for tungsten to 100% for fluorspar, graphite and rare earths. 

Writes McGroarty:

“As a warning unheeded, the cable makes for interesting reading in light of today’s COVID pandemic – and as U.S. policymakers embark on a rolling series of multi-trillion dollar spending bills, the next of which will include infrastructure projects. 

At issue is not just one but three layers of risk:  Maybe the metals and minerals produced by the Chinese mines will be withheld in time of conflict, as Beijing seeks to leverage access for American concessions. Maybe the metals and minerals will soon be prioritized for internal Chinese consumption, under its Made in China 2025 program to drive Chinese technology dominance, with little left for export to the U.S. or elsewhere. 

Or maybe – as the leaked cable presciently notes – the Chinese mines will be disrupted by a pandemic, slamming on the supply chain brakes for a U.S. economy dependent on critical materials that go from arriving “just in time” to “not at all.”

In any case, the warning could hardly be more clear. The U.S. has a choice:  It can take immediate steps to reduce its dangerous dependency on a Chinese supply chain for critical technology metals. Or we can hope COVID 2.0 will not disrupt supply in a second global shut-down – or that Beijing won’t one day decide to curtail access to these critical materials in time of crisis.

But here’s one thing we can no longer do:  If an act of nature or of man cuts off U.S. access to vital technology materials, we can’t claim to be surprised by the appearance of a Red Swan. We’ve seen it coming.”

The post ARPN’s McGroarty for The Economic Standard: Red Swan – a Leaked 2010 Cable on Critical Infrastructure/Key Resource Vulnerabilities Provided Warning Signs We Failed To Act On appeared first on American Resources Policy Network.

In the seventh installment of “Critical Minerals” Alaska, a feature series for North of 60 Mining News that “investigates Alaska’s potential as a domestic source of minerals deemed critical to the United States,” Shane Lasley zeroes in on the metal described above: Tungsten.

Once more, a familiar scenario unfolds here as is the case for so many of the metals and minerals deemed critical from a U.S. perspective – China dominates both production and global supply of the material. Writes Lasley:

“In 2017, the Middle Kingdom produced an estimated 79,000 metric tons of tungsten, roughly 82 percent of the global total for the year. Vietnam, the world’s second largest tungsten supplier, produced 7,200 metric tons last year. Russia, Austria and the United Kingdom round out the world’s top tungsten sources.

In recent years, however, China has put limitations on tungsten mining and exports of this durable metal, causing concerns about global supply.

(…)

While China touts stronger environmental safeguards as one of the primary reasons for restricting the mining of tungsten, as well as a host of other critical metals, many analysts believes the government’s motives have more to do with consolidating mining to the country’s largest producers and bolstering prices.

Whatever the motivations, China’s production and export restrictions have resulted in sharp increases in the price of ferro-tungsten, an iron (25 percent) and tungsten (75 percent) alloy traded on world markets.”

To followers of ARPN, who are no strangers to China’s propensity to play politics with its supply advantages — or, as in the case of Rare Earths, near-total supply monopolies — this should come as no surprise, and should be a consideration for policy makers in the current escalation of trade tensions between both countries.

An opportunity to at least alleviate domestic supply concerns for Tungsten may be found in Alaska, writes Lasley:

“Though none of this tough metal is currently mined in the United States, Alaska is a past producer of the tungsten minerals, wolframite and scheelite, and areas across the state show promise for future production of these and other critical minerals.” 

Among them, the Lost River skarn on the Seward Peninsula about 80 miles northwest of Nome likely holds the most promise, according to Lasley:

“With tungsten, fluorite, tin and beryllium all on USGS’s recent list of minerals critical to the United States, the Lost River deposit may well be worth the work to further define a critical metals deposit on U.S. soil.”

To read Lasley’s full piece, click here.
For other installments of his series, click here.

The post “Critical Minerals Alaska:” A Familiar Scenario for Tungsten – Chinese Domination and U.S. Prospects appeared first on American Resources Policy Network.

As McGroarty argues, “in the case of Tungsten, the U.S. currently produces more than half of the metal it uses each year. Which makes Rhenium the weak link in the WRe chain.”

The reason?  In spite of the fact that Rhenium is critical for high-temperature superalloys used in the turbines of the Joint Strike Fighter-35 and other fighter aircraft, there is no Rhenium in the U.S. National Defense Stockpile and the U.S. currently imports 78% of the Rhenium it uses.

With Rhenium being a byproduct of Copper production, the non-specified military applications could be met if the proposed Resolution Copper mine project in Arizona – expected to increase U.S. Rhenium production by more than 200% – was realized.

However, that project remains in limbo with a necessary land swap bill having met ferocious (and largely baseless) opposition by mining opponents.

Concludes McGroarty:

“U.S. policymakers have a choice to make. They can put in place a strategic resource development policy that would help produce more U.S. supply of critical metals like Rhenium – and, while they’re at it, the 18 other metals for which the U.S. is currently 100% import-dependent – or they can stick with our current faith-based resource policy on the theory that other countries will happily sell us the metals and minerals we fail to mine in the U.S.

Until then, Rhenium will remain an example of the leverage the U.S. places in other country’s hands to provide – or withhold – metals critical to U.S. national security.”

Click here to read the full piece. 

The post “A case study in critical metals inaction” – ARPN’s McGroarty on Rhenium appeared first on American Resources Policy Network.

Like some of the other critical metals and minerals we have covered on our blog – Antimony and Cobalt come to mind – Tungsten lacks the “sex appeal that made investors fall for the rare earth story.”  Says Seddon:

“One of the big differences between tungsten and REEs is their applications. Tungsten is a very industrial metal. It’s mainly used as a carbide or “hard metal” in drilling and cutting tools used in heavy industry. Tungsten is not sexy in that sense. It’s a very solid industrial market. This contrasts with REEs, which are used in a lot of newer, high-tech applications that are much easier for the investment community to make into an exciting story.”

While Tungsten may be used in industrial applications that don’t get people as excited as, say, green technologies, there are no viable substitutes at this point.

Meanwhile, there is a strong geopolitical aspect factoring into the Tungsten narrative:  As is the case with Rare Earths, most of the world’s Tungsten comes from China, which accounts for roughly 80 percent of global Tungsten output, a fact that invites similar challenges as the ones manufacturers relying on REES have seen in the past.

Further complicating the supply picture for domestic manufacturers is the fact that Tungsten from the Eastern region of the Democratic Republic of the Congo and surrounding regions, another main source of supply, has been labeled a conflict mineral and subjected to a series of (confusing) reporting requirements under the 2010 Dodd-Frank financial reform law and respective rules handed down by the SEC in 2012.

A partial solution to at least some of the challenges may lie in the domestic development of our Tungsten supplies, which would allow for reducing our overreliance on foreign minerals and allow for “conflict-free” sourcing.  In any case, however, the Tungsten narrative once more shows that critical resource policy cannot occur in a vacuum, as the strategic implications of our supply issues stretch far beyond the now often-discussed Rare Earths story.

The post Why Tungsten should be on your critical minerals watch list appeared first on American Resources Policy Network.

A just-released Government Accounting Office (GAO) study analyzes some of the supply chain challenges, including in the African region itself, and has found that in spite of some progress largely through greater visibility and awareness, a “lack of security, lack of infrastructure, and capacity constraints could undermine companies’ abilities to ensure conflict-free minerals sourcing.”

A possible, albeit partial solution that would allow for the sourcing of conflict free minerals (as the U.S. does not have any Tin deposits), might lie the development of at least Tantalum and Tungsten deposits in the United States. Considering the fact that among the 25 leading mining nations, the U.S. has dubious honor of being tied for last place with Papua New Guinea for permitting delays in Behre Dolbear’s latest Where Not to Invest report, this possible solution will not be able to help manufacturers in the short-term.

Nonetheless, it would be a good reason for policy makers to start thinking strategically about critical minerals, and prioritize removing obstacles to harnessing our vast domestic – and conflict-free- mineral potential.

The post Compliance with conflict minerals rule remains challenging for manufacturers appeared first on American Resources Policy Network.

Our friends at MetalMiner – also the authors of a white paper on building responsible manufacturing supply chains in the context of conflict minerals — held an event on May 6 in Chicago aimed at clearing up much of the confusion, which was another reason we thought May would be a good month to feature the “Three T’s” on our blog.

Post conference coverage is already available at www.agmetalminer.com and and Metal Miner’s partner site www.spendmatters.com, including discussion of Lawrence Heim’s (Director of The Elm Consulting Group International) presentation offering some practical strategies and approaches for conflict minerals compliance.

Friends of American Resources won’t be surprised to hear us suggest one possible alternative to the difficulties of conflict metals compliance: Development of at least tantalum and tungsten deposits in the U.S. would be a terrific way to help manufacturing companies go “conflict-free.”

The post Three Ts and related issues at MetalMiner’s Chicago conference earlier this month appeared first on American Resources Policy Network.

After a few-month-long hiatus, it is time to bring back our Metals of the Month feature on the blog. In its context, we have been highlighting the breadth of our mineral needs and potential by showcasing the utilities of metals and minerals for which the United States is largely import-dependent, as well as associated challenges.

With oral arguments in a related court case scheduled for this month, and an increased media focus, May presents itself as the perfect month to zero in on a group of metals often referred to as “conflict minerals,” or more casually, the “three Ts” – Tungsten, Tin and Tantalum.

The term “conflict minerals” has “taken center stage for thousands of buying organizations across the United States” with the passage of the 2010 Dodd-Frank financial reform law and respective rules handed down by the SEC in 2012. With many compliance issues relating to requirements for companies to disclose whether they source one of the three Ts or gold (which is also covered by the requirements of Dodd Frank) from the Democratic Republic of the Congo (DRC) and its surrounding issues, the National Association of Manufacturers (NAM), the Business Roundtable, and the U.S. Chamber of Commerce set out to challenge the SEC rule in December.

We’ll touch on the issues relating to conflict minerals in general, and the court case specifically, at a later post, but to kick off our Metals of the Month feature, let’s take a closer look at the three to-be-featured metals and some of their key properties:

Tungsten

• Tungsten stands out through a very high melting point, very high density, extreme strength, high wear resistance, high tensile strength, a low coefficient of expansion, and high thermal and electrical conductivity
• It is used for hardening a variety of tools, bullets, and other military applications, as well as electrical applications.
• The U.S. import dependency rate for tungsten is currently at 42 percent.
• With China controlling most of the world’s output, the tungsten supply outlook stays troublesome, leading the British Geological Survey to rank it as one of the metals most prone to supply disruptions.

Tin

• Tin stands out through its corrosion resistance, non-toxicity and attractive appearance.
• Major traditional uses for tin include electrical applications, cans and containers, construction and transportation, while new uses extend to consumer electronics, lithium-ion technology (where tin can extend battery life), and stainless steel, as well as animal health care products.
• The U.S. import dependency rate for tin is currently at 75 percent.

Tantalum

• Tantalum stands out through the following characteristics: superconductivity, corrosion resistance, very high melting temperatures, a high coefficient of capacitance, bio-compatibility.
• Because of its properties, a large percentage of tantalum production goes into tantalum chemicals, and the manufacture of metallurgical grade powers.
• End uses include chemical processing equipment, military applications and gas turbine blades, industrial high-speed cutting and boring tools and drill bits, electronics, medical devices and specialty glass and structural ceramics.
• The U.S. import dependency rate for Tantalum is 100 percent.

Stay tuned for more “Three T”-related coverage on our blog, Facebook and Twitter throughout the month of May.

The post May’s Metals of the Month – the “Three T’s:” Tungsten, Tin and Tantalum appeared first on American Resources Policy Network.

In a piece for DailyMarkets.com, analyst Jeb Handwerger zeroes in on Antimony. Antimony is a key component in fire retardants as well as batteries, ceramics, touch-screen technology, glass, and ammunition and has seen largely stable prices in unstable economic times.

With China being its top producer controlling nearly 90 percent of global supply and other lead producers not necessarily classifying as “mining friendly jurisdictions,” it comes as no surprise that the British Geological Survey (BGS) ranked Antimony as the “main metal at risk of a supply shortfall” on its 2011 Risk List. One of the developments that has drawn Handwerger’s attention is the closure of the (Chinese-owned) Beaver Brook Antimony Mine – the only North American Antimony-producing mine.

Handwerger does see potential in Atlantic Canada, and discusses this potential, as well as the closure of the Beaver Brook Antimony Mine, and China’s role in a video.

As for overall supply risk, Rare Earths Elements and Tungsten may have overtaken Antimony on the 2012 updated BGS ranking, but undoubtedly, it is a critical metal to be watched.

The post Antimony metal to be watched appeared first on American Resources Policy Network.

However, as Analyst Ken Chernin explains in an interview with The Critical Metals Report, both Tungsten and Fluorspar display characteristics and supply scenarios that evoke parallels with Rare Earths Elements, with China once again playing a key role here.

Says Chernin:

Tungsten, when I first looked at it, read like a rare earth elements (REEs) story in that 86% of global supply came from China. In REEs, it’s around 95%. The Chinese government seems determined to restrict exports because it has made a significant investment in downstream, higher-margin industries using tungsten. Therefore, it is determined to keep what resources it has for itself.

As for Fluorspar, Chernin expects China, which has the purest Fluorspar and is the world’s largest Fluorspar producer according to USGS estimates, to become a net importer of the mineral in the near future.

Coupled with recent reports that Graphite is gaining in strategic importance, developments with Tungsten and Fluorspar show that resource policy cannot occur in a vacuum and that the strategic implications of mineral resource supply issues stretch far beyond the now often-discussed Rare Earths story.

The post Tungsten and Fluorspar – strategic implications of mineral resource supply issues stretch beyond REEs appeared first on American Resources Policy Network.

ARPN’s Tungsten Month is over, but we will make an exception in the case for investment legend Warren Buffett. It seems one of his investment arms is taking a position in the re-commissioned tungsten mine in the United Kingdom, last operated as part of the industrial war effort during World War II. As American Resource followers know, China is the leading supplier of imported tungsten to the U.S., a dependency eased only by our recycling of tungsten scrap.

As the U.S. Geological Survey notes:

“World tungsten supply is dominated by Chinese production and exports. China’s government regulates its tungsten industry by limiting the number of exploration, mining, and export licenses; limiting or forbidding foreign investment; imposing constraints on mining and processing; establishing quotas on production and exports; adjusting export quotas to favor value-added downstream materials and products; and imposing export taxes on tungsten materials.”

Tungsten is one of the targets in the new WTO action brought by the U.S., European Union and Japan against China’s resource export policies. If the WTO rules against China, the country may be compelled to export more product to a tungsten-hungry world. But in the meanwhile, Warren Buffett seems to think it makes sense to develop new sources of supply — even if in this instance the source is an old mine, brought back into production. Maybe U.S. policy-makers should employ the strategy that works for so many investors, and ask: What Would Warren Do?

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